The EU’s VAT rules will change on July 1, 2021. As a result of the change, all items coming from outside the EU that contain goods must be cleared through customs. Right now, no taxes need to be paid on online purchases worth less than EUR 22 arriving in Finland. The change to legislation seeks a more equal competitive situation for domestic companies and companies in other EU countries.
At the same time as the VAT change, an optional special VAT system for online retailers, the IOSS (Import One-Stop Shop), will be introduced in the EU. By using this system, online retailers can collect taxes from consumers already at the time of purchase (for items worth a maximum of EUR 150).
“This change is good for the competitiveness of Finnish e-commerce, and it makes competition more equal among different markets. Of course, it will also affect the everyday life of many Finns who buy goods online, as taxes will now need to be paid on all items coming from outside the EU. Our goal is to make sure that the processing of incoming items is as smooth as possible,” says Sami Finne, who is responsible for Posti’s international e-commerce services.
Posti has prepared for the change by investing in the efficient processing of goods that require customs clearance, promoting the use of the IOSS solution together with online stores and dedicating more resources to customer service.
Paying the tax to the online store is the easiest option for consumers
The biggest online retailers are expected to actively take part in the common European system (IOSS, Import One-Stop Shop), where the consumer pays the VAT directly in the online store. If the VAT is paid in the online store, items can be quickly moved to delivery, and consumers are not required to pay handling fees in Finland.
“For consumers, it feels natural and easy to pay VAT at the time of purchase, in which case delivery will also be quick and there will be no extra costs. We expect many online retailers to start using the solution already this summer. Consumers can check on the online retailer’s website whether the retailer offers the opportunity to pay VAT,” says Finne.
However, not every online store will be able to collect VAT, at least not right after the change, in which case VAT will need to be paid in Finland. With the digital customs clearance service provided by OmaPosti, consumers can clear their item before it even arrives in Finland. By doing this, consumers are able to make sure that the item is delivered quickly, as the item will be immediately moved from customs clearance to delivery. The price of the digital customs clearance service is EUR 0.90 + VAT per item.
Consumers may also always choose to pay the VAT themselves in Finnish Customs’ own system. In addition to this, they will also need to pay Posti’s EUR 2.90 handling fee, which covers the warehousing and processing costs of goods arriving in Finland. This process will also be used for items with incomplete item information and items worth more than EUR 150.
Instructions for consumers regarding the VAT change on July 1, 2021
We recommend that consumers download the OmaPosti app or use OmaPosti on their browser: www.posti.fi/omaposti. OmaPosti is a safe and secure way to track items and pay VAT. Digital customs clearance will become available in OmaPosti during spring 2021.
The easiest option is to buy from an online store where VAT can be paid at the time of purchase. Online stores state on their website whether VAT can be paid at the time of purchase.
When buying from an online store, you should always provide your real email address and mobile phone number. Notices of arrival are sent to the addresses Posti gets from online stores.
“It’s a big change, but a good one, both for Finnish e-commerce and for consumers. Items will have better tracking information and buying will be safer than ever before,” Finne says.